Retail inflation slowed for the second consecutive month, slipping below the double-digit mark in April and bringing much-needed relief for the government battling stubborn price pressures but some food prices remained sticky. The annual inflation rate based on all India general CPI for April was at 9.39% compared to 10.39% in the previous month.
The inflation rates for rural and urban areas for April 2013 were 9.16% and 9.73% respectively. The final inflation rates for rural and urban areas for March 2013 stood at 10.41% and 10.38%, respectively. The easing in retail inflation is also likely to provide headroom to the central bank to cut interest rates in the months ahead. While RBI gives more weightage to the wholesale price index-based inflation it also looks closely at the consumer price inflation. RBI has been cautioning about the stubborn retail inflation particularly food prices. WPI inflation has eased to 5.96% in March, lowest in nearly 40 months.
Monday’s retail inflation data showed pressure still existed on some food items, while vegetables, milk and milk products, fruits displayed signs of softness. Cereals and products rose 16.65% in April, while egg, meat and fish shot up 13.6%, but the pace of increase was subdued compared to the previous months. Overall food and beverages inflation remained at double-digit level of 10.61%.
Economists said they expect retail inflation to moderate in the months ahead on the back of expectations of a normal monsoon rains and robust harvests.
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